Another Obama-backed energy firm nears insolvency. Hey, is there an echo in here?

posted at 3:01 pm on July 5, 2012 by Erika Johnsen

Breaking news: The Obama administration has once again demonstrated a phenomenal knack for trying to pick economic winners and losers, and invariably picking losers. It’s shocking, I know. (Hint: If the government feels the need to “invest” in a venture, because the private sector hasn’t or won’t… right away, wrong.)

This time, it isn’t solar, but rather a Department of Energy-backed geothermal company that’s having trouble keeping its head above water.

A geothermal energy company with a $98.5 million loan guarantee from the Obama administration for an alternative energy project in Nevada — which received hearty endorsements from Energy Secretary Steven Chu and Senate Majority Leader Harry Reid — faces financial problems, and the company’s auditors have questioned whether it can stay in business.

…Nevada Geothermal Power (NGP) has incurred $98 million in net losses over the past several years, has substantial debts and does not generate enough cash from its current operations after debt-service costs, an internal audit said. …

“The company was in danger of defaulting on its financial obligation, and the [Department of Energy‘s] assistance served as a de facto bailout,” Mr. Jordan said. “After receiving a taxpayer-backed $98.5 million loan guarantee, the company is still struggling.”

And before you ask, yes, this is the same company that Senate Majority Leader Harry Reid lauded as a job-creator that would help Nevada tap its potential as the “Saudi Arabia” of geothermal energy. But if Nevada were really the Saudi Arabia of geothermal energy, why the heck would the government need to be dishing out loan guarantees to support it? Even with federal support, NGP is on the struggle-bus — and yet again, the taxpayers are the ones who stand to lose. Thanks for nothing, feds.

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And before you ask, yes, this is the same company that Senate Majority Leader Harry Reid lauded as a job-creator that would help Nevada tap its potential as the “Saudi Arabia” of geothermal energy. But if Nevada were really the Saudi Arabia of geothermal energy, why the heck would the government need to be dishing out loan guarantees to support it? Even with federal support, NGP is on the struggle-bus — and yet again, the taxpayers are the ones who stand to lose. Thanks for nothing, feds.

…Nevada Geothermal Power (NGP) has incurred $98 million in net losses over the past several years, has substantial debts and does not generate enough cash from its current operations after debt-service costs, an internal audit said. …

If only they could print their own money – they’d so totally be solvent.

JohnMcIlveen, a stock analyst at Toronto-based Jacob Securities Inc. who monitors NPG, said he did not think the federally guaranteed loan was in trouble because it “holds all the cards.” But he said he did not see the subordinate lender “getting out whole.”

He said Blue Mountain 1 is not producing as much energy as the company had hoped and needs $20 million to help increase its capacity, which could be difficult to raise.

Also, Reid’s weak tea deflection based response:

Mr. Reid’s spokeswoman Kristen Orthman said NGP has received bipartisan support because “programs and incentives for clean energy have helped create jobs and make Nevada a growing leader in geothermal energy production.”

We need to make a roster of all dead “green energy” companies that received tax money and tattoo it on Obama’s back. Then, we should do the same for every following President. That will possibly make them think twice before wasting funds.

Out of curosity, has anyone done a running tally on the number of firms granted DOE investments and the number that have gone belly up – an interesting side note would be those that were on the financial skids before the DOE bailed the out. As Erika Johnson said, “If the government feels the need to “invest” in a venture, because the private sector hasn’t or won’t… right away, wrong”.

I have a couple of stats that the Obama campaign might want to being tracking and reporting along with the usual hogwash they ask us to consume (yes, tongue in cheek, but I would like so see these numbers):

A. Number of Jobs Un-created (due to failure of bailed-out firms); and

B. Amount of Taxpayer Income “outsourced” to failed businesses.

Outsourcing tasks can make a lot of sense for a company (assuming the President understands what outsourcing means – it’s a business term so chances are slim that he’s ever heard of it).

Outsourcing money (our money) to any firm with a Prius in the executive parking lot or the names of company executives on an Obama donor list does not make sense. At least not to the rest of us.

Mr. Reid’s spokeswoman Kristen Orthman said NGP has received bipartisan support because “programs and incentives for clean energy have helped create jobs and make Nevada a growing leader in geothermal energy production.”

Difficultas_Est_Imperium on July 5, 2012 at 3:08 PM

Thats the best part. Bankruptcy must be part a of “growth” in Nevada somehow.

But Mr. Reid has taken the nascent geothermal industry under his wing, pressuring the Department of Interior to move more quickly on applications to build clean energy projects on federally owned land and urging other member of Congress to expand federal tax incentives to help build geothermal plants, benefits that Nevada Geothermal has taken advantage of.

“This project is exactly the type of initiative we need to ensure Nevada creates good-paying jobs,” Mr. Reid said in a statement in April 2010, after he visited the company’s Nevada plant. That was two months before the project even got conditional approval for the Energy Department loan guarantee.

During the tour, Mr. Reid had a chance to see electric generation equipment installed by a company called Ormat Technology, which is a Nevada Geothermal partner. Ormat’s lobbyist in Washington, Kai Anderson, and one of the company’s top executives, Paul Thomsen, are former aides to Mr. Reid.

Just last month, again with Mr. Reid’s support, Ormat secured its own Energy Department loan guarantee, worth $350 million, to help support three other Nevada geothermal projects that are expected to produce 113 megawatts of power.

Mr. Reid has received some support from the industry, in the form of at least $43,000 worth of campaign contributions from the geothermal industry since 2009, according to an analysis of federal campaign finance records. Source

Mr. Reid has received some support from the industry, in the form of at least $43,000 worth of campaign contributions from the geothermal industry since 2009, according to an analysis of federal campaign finance records.

Flora Duh on July 5, 2012 at 3:18 PM

Is it just me, or is the ratio of money money given to money received really lopsided with these pols? I mean for a lousy $43k, dingy harry gives away $98.5 Million of our money. You’d think he’d at least get like a 10:1 ratio … minimum. These jerks don’t even have a good idea of value in their corruption.

A geothermal energy company with a $98.5 million loan guarantee from the Obama administration for an alternative energy project in Nevada — which received hearty endorsements from Energy Secretary Steven Chu and Senate Majority Leader Harry Reid — faces financial problems, and the company’s auditors have questioned whether it can stay in business.

…Nevada Geothermal Power (NGP) has incurred $98 million in net losses over the past several years, has substantial debts and does not generate enough cash from its current operations after debt-service costs, an internal audit said. …

They had $98 million in losses and a $98.5 million loan guarantee from Obama&Co. Gee (Oh Thermal), what a coincidence!

Geothermal energy usually works by heating up water, which is rather scarce in the Nevada desert. Did Nobel Chu consider that before he signed off on $98.5 million?

Hey Dirty Harry, we could get lots of electricity from nuclear power plants if you’d just open up Yucca Mountain for the wastes.
Just sayin’…

1. Make a huge deal in first campaign and in first year of Presidency about “Green Energy and Jobs”.
2. Use political pressure to ensure crazy loan guarantees to “Green Energy” companies tied to all your political cronies.
3. Said political cronies see to it that the company goes under…after the loan guarantees are approved of course.
4. Funnel all or a large portion of now LAUNDERED tax payer monies back into the campaign of The One.
5. The One is re-elected and thus is now unaccountable to ANYONE.
6. Continue with money laundering scheme, only now steps 1-3 no longer necessary and replace step 4-6 with PROFIT.

…and to think President downgrade is taking his bus tour down “bitter clinger” lane to tell everybody how he is the great job creator…..
…..it’s those evil Republicans like Romney that are outsourcing our future.

Related, on the boondoggle solar, a Forbes comment:
Gen Clark’s unmentioned recent election to the board of a solar manufacturer may explain why he’s spewing marketing drivel…
Essentially no solar projects would exist without Massive subsidies. It’s no accident that these posters are calling for “elected officials”, rather than consumers, to rescue solar power; private industry and consumers won’t touch solar without a “gold rush” of government incentives. (http://www.nytimes.com/2011/11/12/business/energy-environment/a-cornucopia-of-help-for-renewable-energy.html) Despite technology advances, and heavy subsidies, utility-scale solar thermal power still costs (on a level, unsubsidized, delivered basis) about 4x nat gas power. Disbursed PV is on the order of 10x.
The solar industry is in decline because it is built on a mountain of unsustainable subsidies, and has no prospects without even more.

For all of the hysterical global warming (oops — climate change) alarmists, here’s a question:

If geothermal energy production caught on in a big way, who’s to say what the consequences would be for precious Mother Gaia?

What if premature release of heat from the earths outer core could negatively effect the physical properties of the inner earth and change the dynamics of plate tectonics? Why wouldn’t bringing heat up from the depths of Mother Gaia to the surface contribute to “global warming”?

Hmmm. Me, I think it’s way too arrogant to assume that the earth will have much of a reaction to anything that mankind can throw at it, but if you buy into the carbon dioxide nonsense, then why are the questions in the previous paragraph at least as valid?

I’ll be holding my breath (thereby saving the planet) waiting for an answer from you Greenies.

Hmmmm……how many Obama backed businesses have failed /are failing in the last 3+ years?
How many of the businesses backed by Bain during Romney’s tenure failed?
How many of those left the taxpayers footing the bill?
Which of these two men would you prefer to have “investing” your money?
Romney invested private money and on average was VERY successful. Obama “invests” public money and so far has NO success.
Love to see any liberal out there answer these questions and then try to make the case for Obama.
Hope Romney’s team is paying close attention, and is ready with the ads.

Is it just me, or is the ratio of money money given to money received really lopsided with these pols? I mean for a lousy $43k, dingy harry gives away $98.5 Million of our money. You’d think he’d at least get like a 10:1 ratio … minimum. These jerks don’t even have a good idea of value in their corruption.

Lost in Jersey on July 5, 2012 at 3:25 PM

During the tour, Mr. Reid had a chance to see electric generation equipment installed by a company called Ormat Technology, which is a Nevada Geothermal partner. Ormat’s lobbyist in Washington, Kai Anderson, and one of the company’s top executives, Paul Thomsen, are former aides to Mr. Reid.

Harry’s just helping out some old buddies. Per the rules set by the media, nothing wrong with that.

But if Nevada were really the Saudi Arabia of geothermal energy, why the heck would the government need to be dishing out loan guarantees to support it?

Don’t be silly. Government hacks know more about the energy industry than the people who actually work in it. They’re really smart and have the superhuman ability to see things better than all of us put together. I know that because they keep telling me so.

somebody really needs to make a comprehensive list / matrix of all the companies Chu has dished our tax dollars to, tracking / relating what their performance has been since. And tallying all the misappropriated funds and the Obamunist donor connections.

How do you make a million dollars in the “green” energy market? Start with at least 2 million and work your way down. Just be sure it is a government loan so you can donate to the re-elect BHO compaign and you also won’t have any of your own skin in the game. Jerks!

OK, y’all … time for a scorecard. Can someone put together a quick list of the O’s investment failures, along with the $$’s of grants/loan guarantees (that will never be repaid).
Solyndra $535 million
NGP $ 98.5 million
I know there are more, and I think this would be most telling.

Geothermal works if you live in a place with volcanos.
And it doesn’t hurt if you have LOTS of water around.
Can anyone say, Iceland ?
The problem with geothermal power generation you have the those gawdamed fundamental laws of THERMODYNAMICS to deal with. Efficiency is a ratio of the temperature limits of your ‘power cycle’ … (see Carnot) Geothermal offers steam heat but significantly lower in working temperature to a pressurized water, coal fired boiler power generation system. Nobel Chu should be able to figure this out from his undergraduate days. But then it is obvious that he is no longer using his analytical side of his brain anymore. His job is to help get King Putt re-elected. And President Downgrade need$ moola.

Nevada does have geothermal energy and the private sector is doing just fine without subsidies where this is appropriate.

One of the problems with using geothermal heat is that the water is saturated with dissolved minerals. If you are going to drive steam turbines you must first have steam generated from demineralized/deionized water in a sealed loop. Instead of using fire to heat the water in boilers, tubes with geothermal produced hot water/steam must constantly be cleaned of mineral scale.

This time, it isn’t solar, but rather a Department of Energy-backed geothermal company that’s having trouble keeping its head above water.

Dang Erika – I thought you might have said “… geothermal company that’s in hot water.” Get it? Hot water – geothermal? Eh. Never mind. :)

Does anybody remember how an earthquake in the Yellowstone area altered the timing and magnitude of “Old Faithful”? Most geothermal sites are located along fault zones – so who’s to say that an earthquake wouldn’t have an adverse affect on the reliability of a given site? Sink a bunch of money into building a power plant, then have an earthquake or tremblor drastically reduce the output of said power plant. Hmmm – not good.

Breaking news: The Obama administration has once again demonstrated a phenomenal knack for trying to pick economic winners and losers, and invariably picking losers. It’s shocking, I know. (Hint: If the government feels the need to “invest” in a venture, because the private sector hasn’t or won’t… right away, wrong.)

One of the other problems with the government picking winners and losers is that it might be motivated to tilt the playing field in favor of those companies and/or technologies it has chosen to support. So, let’s say that Obama wants this to succeed, you think cap and trade and other emission control regimes might make the competing energy more expensive so this technology is competitive.

Never a good idea to have the ones making the rules funding some of the teams as well.